Investigating how realising export potential through regional integration can contribute towards economic development in Africa

South Africa - 21 November 2017

One of the most compelling arguments for regional trade and integration in Africa rests on the fact that Africa is the most fragmented market in the world, with only 10‒13 per cent of the continent’s trade being with other African nations. However, Africa could soon witness increased regional trade and integration with the implementation of the Tripartite Free Trade Agreement (TFTA) which to date has attracted 26 signatory countries and will ultimately account for more than half the continent's GDP. For African countries to grow their regional trade, they need to identify viable trade opportunities. This study sets out to identify such opportunities while also determining the implications thereof for economic growth and development.

The study consists of three articles: Article 1 determines the product-country combinations (export country-product-import country) with growing and sizeable import demand and matched export supply capacity among the 26 TFTA countries, using filter 2 of the Decision Support Model (DSM). A total of 334 matches have been identified. Article 2 will identify the barriers to trade and the trade costs that prohibit the utilisation of the country matches identified in Article 1. It will also make relevant policy recommendations. Article 3 will determine the implications for economic growth and development in the various countries by performing a GTAP analysis, assuming that the matched export potential can be realised to some extent.

2016‒2017 progress:
Article 1 has been drafted and will be finalised and then presented at the Biennial Conference of the Economic Society of South Africa in August 2017. Article 2 will consist of desktop research and will be finalised by December 2017. The aim is to finalise all three articles for submission by November 2018.

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